With U.S. credit card delinquencies at a 15 year high and household debt climbing to a record $1.25b, many investors are asking which parts of the market might hold up better if consumer finances stay under pressure. Consumer staples stocks, especially larger dividend payers with stable risk profiles, are often seen as potential anchors when budgets tighten. This article looks at three stocks from our Consumer Staples Stocks screener that are directly exposed to the latest credit stress story, and explores how their businesses could be positively linked to this backdrop, giving you ideas for further research.

Lamb Weston Holdings (LW)

Overview: Lamb Weston Holdings is a major producer of frozen potato products, supplying fries and appetizers under its own and private label brands to restaurants, foodservice distributors, and retailers across North America and international markets. Its products sit in the sweet spot of convenient, low-ticket comfort food that consumers tend to keep buying even when budgets come under pressure.

Operations: Lamb Weston generates about US$4.3b of revenue from North America and US$2.2b from International operations, with the bulk of its business still anchored in its home region.

Market Cap: US$6.5b

Lamb Weston Holdings gives you direct exposure to a staple food category that often proves resilient when households are squeezed, while also offering a pipeline of cost savings and efficiency efforts pushed by an activist investor. At the same time, you need to weigh up its high debt load, recent margin pressure and ongoing legal and environmental obligations. There is also a risk that weaker restaurant traffic or changing dietary trends could cap volume growth. Analysts and the Simply Wall St DCF model also see a large gap between current pricing and estimated fair value, which could be appealing if you are comfortable with the execution and governance challenges that come with a relatively new management team and restructuring in Europe.

Lamb Weston’s mix of resilient comfort food, activist pressure and a wide gap between price and estimated fair value raises an obvious question: see how the DCF valuation analysis for Lamb Weston Holdings could reframe the risk around its debt, margins and Europe turnaround

Maple Leaf Foods (TSX:MFI)

Overview: Maple Leaf Foods is a long established Canadian food company that focuses on packaged and fresh protein, selling branded and private label meat, poultry and plant based products across retail and foodservice channels in Canada, the U.S. and several international markets.

Operations: Maple Leaf Foods generates most of its revenue in Canada at about CA$3.6b, with roughly CA$408m from the United States and around CA$5m from other markets.

Market Cap: CA$3.6b

Maple Leaf Foods offers exposure to everyday protein staples at a time when many households are feeling the strain of record U.S. credit card balances and rising borrowing costs, which can support demand for affordable at home meals. The company has recently become profitable and analysts expect strong earnings growth, helped by automation projects and a planned spin off that could sharpen the focus of each business. However, the balance sheet carries meaningful debt and some recent gains reflect one off items that may not repeat. In addition, the stock trades at an above market P/E, the dividend is not yet fully covered by earnings, and there is execution risk around the spin off. As a result, the potential upside comes with trade offs that investors may wish to weigh carefully.

Maple Leaf Foods’ automation and recent return to profitability hint at earnings that could be accelerating faster than the headline P/E suggests, but the debt load and spin off plan may be masking a crucial twist in the analyst forecasts for Maple Leaf Foods

Hershey (HSY)

Overview: Hershey is a global confectionery and snacks company that makes chocolate, candy, gum, mints, protein bars, pantry ingredients and salty snacks under brands such as Hershey’s, Reese’s, Kit Kat, Kisses, SkinnyPop and Pirate’s Booty, selling mainly through supermarkets, mass retailers, convenience stores and wholesalers.

Operations: Hershey generates about US$9.7b of revenue from North America Confectionery, around US$1.3b from North America Salty Snacks and roughly US$1.0b from International markets.

Market Cap: US$34.8b

Hershey gives you exposure to affordable treats that many households keep in their baskets even when credit card bills bite, which is especially relevant with U.S. delinquencies at a 15 year high and borrowing costs elevated. The company is using price pack design, new products such as Reese’s extensions and salty snack acquisitions to keep volumes supported while it works through high cocoa costs and weaker demand in some channels. At the same time, margins have come under pressure, debt is elevated and the dividend is not fully covered by earnings, so the premium P/E and analyst optimism about margin recovery and earnings growth deserve scrutiny. The key consideration is whether the combination of resilient categories and easing input costs can outweigh these funding and execution risks.

Hershey’s premium P/E might be masking a more interesting tension between resilient treats, elevated cocoa costs and debt-funded growth. The real question is what the analysis report for Hershey reveals about how that trade off could shift next.

The three stocks covered here are just a starting point. The full Consumer Staples Stocks screener on Simply Wall St surfaced 20 more companies with equally compelling narratives that could fit this same idea of steady food, beverage, grocery, household and personal care demand. Identify your own highest conviction opportunities by using the Consumer Staples Stocks screener to filter for the specific catalysts, risk profiles and dividend characteristics that matter most to you.

Take Control of Your Investment Journey

If Lamb Weston Holdings or any of these companies sound like a great opportunity, register for FREE with Simply Wall St and add your companies to a Watchlist to monitor the share price against the fair value the ideal entry point. Once you've made your move, manage your holdings with our Portfolio Command Center that filters out the noise to deliver only the most critical, actionable updates. Throughout your journey, our Community allows you to filter the best ideas from thousands of investor perspectives. By uncovering hidden catalysts and risks early, you'll accelerate your decision-making and stay one step ahead of the market.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.